Airbus consults European Works Council over A380 job losses
5 March 2019
Airbus has started discussions with its European Works Council over job losses resulting from its decision to stop production of the A380 airliner. Airbus announced in February it will cease deliveries of the A380, the world’s largest passenger airliner, in 2021. The company says between 3,000 and 3,500 job will potentially be impacted over the next three years, split between 1,300 blue collars and 2,100 white collars. Of these, between 500 and 600 jobs will be lost in the UK, 400 to 500 in Spain, 1,100 to 1,200 in Germany and 1,100 to 1,200 in France.
During the meeting with the EWC, Airbus also presented its roadmap for the A380 programme, which included the transition of production, industrial adaptation, plus service support to A380 customers for the years to come. Airbus told the EWC a significant number of internal mobility opportunities would be available, and its will put in place dedicated services to help employees with “competence reconversion”. It said it was “dedicated to managing industrial adaptations responsibly and successfully, as demonstrated in the past”.
Spanish law provides for continuance of EWCs with UK participation after no-deal Brexit
4 March 2019
The Spanish Parliament has adopted legislation to deal with the UK’s exit from the EU without an agreement. It includes provisions relevant to Spanish EWCs. Royal Decree-Law (Real Decreto-ley) 5/2019 of 1st March, which will come into effect on 30 March if there is no Brexit agreement, states that European Works Councils set up or agreed before Brexit day, in companies or groups with UK employees and with central management in Spain, will remain valid in the terms provided for in the Spanish EWC law until they are modified in accordance with the provisions of that law (Article 10).
It is not totally clear what effect this will have. As a minimum, it appears to mean that Spanish EWCs cannot be declared non-valid simply because there are UK employees who may be represented on the EWC. It is not clear whether it also means that any UK reps on the EWC must be allowed to keep their seats – that could be contrary to the terms of the EWC agreement if that agreement only gives seats to countries in the European Economic Area (EEA). There are believed to be no more than 20 EWCs currently governed by Spanish law.
UK Parliament approves changes to no-deal Brexit EWC legislation
27 February 2019
The UK House of Commons and the House of Lords have now approved legislation making changes to the UK EWC (“TICE”) Regulations in the event of a no-deal Brexit. The final version of the Regulations were identical to those laid in draft form in October, meaning that if they come into force the legal position for UK-based EWCs will be highly complex, confusing, and frankly a complete mess.
Dutch court rules on EWC’s right to be consulted
30 November 2018
A court in Rotterdam has ruled on two aspects of a European Works Council’s right to be consulted – whether a plant closure in one country is “transnational” and whether the EWC must be consulted before local works councils. US aluminium producer Alcoa planned to shut two plants in Spain with the loss of around 700 jobs, amounting to around 20% of its European workforce. It initiated a consultation process with the Spanish works councils in October 2018, and at the same time informed its EWC about the possible reorganisation.
The EWC believed it should have been consulted first, so that it could have exerted some real influence on the decision-making process. It applied to the court in Rotterdam for an injunction requiring the company to suspend its negotiations with the Spanish works council until it had consulted the EWC. The Court first had to rule whether this was a “transnational” issue within scope of the EWC. It said it was “sufficiently plausible that there is a cross-border issue” because (1) 700 employees is a large number, and is 20% of Alcoa’s European workforce; (2) the closures could impact other parts of the group in other countries, notably a Shared Service Centre in Hungary; and (3) the company seemed to accept it was a cross-border issue because it had informed the EWC of the planned closure. However, the court went on to rule that the company did not have to consult the EWC before the national works council and trade unions. It said the EWC Directive imposes no such obligation (nor does the Dutch EWC legislation), and neither did the Alcoa EWC agreement. Rather, consultation can take place simultaneously. It therefore dismissed the action. Nevertheless, the ruling on what constitutes a transnational issue is useful for European Works Councils.
Implications of EU-UK Withdrawal Agreement for EWCs
15 November 2018
The EU and UK have reached a Withdrawal Agreement regulating the UK’s exit from the EU, due to take effect on 29 March 2019. The Agreement includes a transition period ending on 31 December 2020 (or possibly later, if extended), during which the European Works Council directive (and almost all other directives) will continue to apply to the UK as though it were still an EU member state.
After the transition period ends, the EWC directive would no longer apply to the UK – either under the “single customs territory” (also known as the “backstop”) or under a future trade deal. Annex 4 of the Ireland/Northern Ireland Protocol to the Withdrawal Agreement commits the UK to “non-regression of employment standards” during the “backstop” period after 31 December 2020, but this would not mean that the EWC directive would continue to apply to the UK. Once the directive ceases to apply to the UK, there will be implications for: (a) the requirement to have an EWC; (b) the position of UK reps on the EWC; and (3) the governing law of the EWC. See EWCs and Brexit for more details.
UK to maintain EWC law after Brexit
31 October 2018
In a surprise move, the UK Department for Business has decided to maintain the UK’s legislation on European Works Councils after Brexit, potentially meaning many companies will have to operate two EWCs. Draft legislation laid in Parliament earlier today would make changes to the EWC Regulations (the Transnational Information & Consultation of Employees Regulations 1999 or “TICE” Regs) in the event of a no-deal Brexit.
The Department says that the changes are merely “technical”, reflecting the fact that the UK will no longer be a member state of the EU. However, since nearly all companies with UK-based EWCs will still have to comply with the EWC directive after Brexit – by having an EWC subject to the law of one of the EEA member states, the result of the changes to the UK legislation is that such companies will be subject to two separate EWC legal regimes. They would therefore either have to have one EWC subject to two enforcement regimes (in an EEA member state and in the UK), or set up two separate EWCs. The draft legislation will make the TICE Regs extremely complicated and confusing, riddled with internal contradictions, which would leave the legal position of UK-based EWCs a complete mess.
Inditex to set up a European Works Council
28 September 2018
Spanish fashion retailer Inditex has agreed to set up to a European Works Council for the first time. Announcing the move, global union federation UNI said the Inditex EWC was “a positive step at European level for workers’ rights in the company which has already signed a global agreement with UNI Global Union in 2009”. The EWC will represent workers from both the stores and its logistics platform. It will have 25 seats representing 22 countries.
The agreement, which runs for four years and then automatically renews, was signed earlier this month by Global head of HR of the Inditex group Pablo Frances, and Laila Castaldo, senior coordinator, from UNI Global Union’s Commerce sector. The first official meeting of the EWC will be held in La Coruna in Spain at the beginning of 2019. UNI Europa says it will have a significant mediating role. UNI’s Head of Commerce, Mathias Bolton said, “In a company that is constantly evolving, this agreement is a significant development. It will provide an invaluable tool for information and consultation on matters that affect all Inditex workers in Europe. This forum will complement the dialogue already established at global level by the global agreement between Inditex and UNI Global.”
CAC to consider EWC “forum shopping” complaint
20 September 2018
Trade union Unite is challenging a company’s right to change the governing law applying to negotiations for a European Works Council. The case has been brought at the Central Arbitration Committee in London against the management of US IT company Hewlett Packard Enterprise. HPE is currently negotiating a European Works Council agreement with a Special Negotiating Body representing its employees in Europe.
It initially chose the UK for the governing law applying to the negotiations, but midway through the process it has switched to Ireland. Unite, which is advising the SNB, says HPE has done so to prevent SNB reps choosing their own training provider. This is one of the few points on which the UK and Irish EWC laws are different (aside from enforcement and penalties). UK law says the employer must provide the reps with the “means required to undertake training” – widely interpreted as meaning the reps can choose the training provider and the company must pay the costs. Irish law says the reps must “be provided with appropriate training by their employers”. Unite is arguing that the employer’s choice of governing law should be fixed for the duration of the negotiations, and cannot simply be changed at will to benefit from different provisions in different national laws. It is likely to be some months before any ruling is delivered, but it could have implications not just for governing law changes during SNB negotiations, but possibly also where management seeks to change the governing law applying to its European Works Council. Many companies with UK-based EWCs are considering chaning the governing law because of Brexit.
Brexit and EWCs – UK government publishes guidance on “no deal” Brexit
3 September 2018
The UK government has issued guidance on workplace rights in the event of a “no deal” Brexit. It includes a section on European Works Councils. Anyone wishing to know what the implications will be for their EWC – whether UK reps will keep their seats, whether UK law can govern the agreement, or even whether their employer will still have to keep its EWC – will be disappointed.
All the guidance says is that, in the event of a no-deal Brexit, “the government will ensure the enforcement framework, rights and protections for employees in the UK European Works Councils continue to be available, as far as possible”. This is believed to refer to protections for UK members against unfair dismissal or detrimental treatment. The guidance also says that no new requests to set up an EWC could be made – this seems to acknowledge that with the EWC directive no longer applying to the UK after 29 March 2019 in the event of a no-deal Brexit, it would not be possible to negotiate an EWC agreement under UK law. Mystifyingly, the guidance goes on to say “provisions relevant to the ongoing operation of existing EWCs will remain in force” and “requests for information or to establish EWCs made before EU exit but not completed by EU exit will be allowed to complete”. Given that the directive would no longer apply to the UK in a no-deal scenario, it cannot be the case that an EWC (or negotiations with a Special Negotiating Body) could be governed by UK law after Brexit in a way that complies with the EWC directive. The government has refused requests to clarify what its “guidance” means. It must therefore be handled with care.
ETUI sharply critical of Commission’s EWC review
27 July 2018
The European Trade Union Institute has accused the EU Commission of missing an open goal with its recently-published evaluation of the recast European Works Council directive. Writing for the website Social Europe, the ETUI says the Commission correctly identified “numerous gaps and problems” with the directive – it has not encouraged the creation of more EWCs, sanctions in many country are not effective or “dissuasive”, the meaning of “transnational issues” is not clear. But its solutions – producing a handbook, providing funds for EWCs and facilitating exchanges between member states on the issue of sanctions – are missed chances.
The ETUI says the problems require solutions that treat the cause, not the symptoms. For example, the lack of effective sanctions, the lack of means to finance litigation, the abuse of confidentiality, the legal status of the EWC, are all problems caused by legal shortcomings with the directive which require legal remedies. The ETUI concludes that there was the goal, gaping wide open, but the Commission missed the ball entirely.
Brexit – impact on EWCs unclear from UK government White Paper
12 July 2018
The UK government has issued a White Paper describing how it would like the EU-UK relationship to work after Brexit. On employment laws it says the UK will incorporate “binding provisions related to open and fair competition, with … reciprocal commitments to maintain current high standards through non-regression provisions in … employment rules”. It also repeats what the government has said many times: “Existing workers’ rights enjoyed under EU law will continue to be available in UK law on the day of withdrawal”.
It says nothing specifically about European Works Councils. Nevertheless, it remains unlikely that any agreement between the EU and UK would include the continuing application of the EWC directive to the UK, since this would almost certainly have to include the continuing jurisdiction of the European Court of Justice in the UK, something the UK government has repeatedly ruled out.
Commission’s review of EWC directive sees no need for changes
14 May 2018
The European Commission has published its evaluation of the recast European Works Council directive. It concludes that the directive has improved legal clarity and information rights for workers, but has not arrested the decline in the number of new EWCs or improved consultation rights. It is planning new guidance on the directive, but will not be proposing any changes to the text of the legislation, something that will sorely disappoint trade unions. However, it may look more closely at the adequacy of enforcement and penalties imposed by member states.
Article 15 of the directive requires the Commission to report to the European Parliament and member states (by 5 June 2016, so it is almost 2 years late) “on the implementation of this Directive, making appropriate proposals where necessary”. The evaluation report is based on research conducted in 2016 by consultancy firm ICF, plus input from EU and national social partners, EWC practitioners, research institutes and labour law experts. It concludes that the directive:
- has improved the clarity of the legal framework, eg the concept of “transnationality”, though it admits it is often difficult to interpret in concrete cases;
- has not stopped the decline in the number of new EWCs being set up (now around 20 a year), and more needs to be done to encourage their creation since half of the companies eligible do not yet have one;
- has improved the information for workers in terms of quality and scope, but it has been less effective as regards consultation. Despite having the right to express an opinion, EWC members seem to have little influence in the decision-making process in their companies, notably in cases of restructuring;
- has not created additional costs for employers compared to the 1994 Directive, and for most employers, the benefits outweigh the costs. The right to training without loss of wages is largely respected and constitutes a major support for EWC reps.
The Commission is not proposing any changes to the directive, but it will be publishing a “practical handbook which will “provide concrete advice and guidance” for employers, EWC members, trade union reps and workers, and help employers and company reps fulfil their legal duties. It will aim to increase the take-up of EWCs, further improve the effectiveness of EWC in raising social standards across the EU, and spread good practice by sharing examples of approaches that have worked well in practice. The Commission will develop the handbook in 2018, in cooperation with the social partners and with the support of experts and practitioners. It will publicise it via a dedicated website and other means. It will also provide €7 million in 2019 to social partners for setting up projects to publicise and support the use of the handbook, as well as initiatives that support implementation of the legal requirements, raise awareness of the potential benefits of EWCs and improve their establishment and functioning.
Alongside its evaluation of the recast EWC directive, the EU Commission published a Staff Working Document which gives more details on its evaluation, and reports on how member states have implemented the directive in their national legal systems. On this latter point it identifies a number of deficiencies. Most of these are relatively minor, eg the laws in Greece and Iceland do not contain specific provisions on the information to be given to the European social partners at the start of EWC negotiations, and Danish law does not allow the Special Negotiating Body to meet without management. In some cases, national law goes further than the directive requires, eg in the Czech Republic, Germany and Estonia management must give a reasoned response to the EWC’s opinion, while in Finland, Hungary and Italy the provisions on training also cover the content of training and the rate of remuneration. The most important deficiencies identified by the Commission are in the area of enforcement and penalties. The document states (p.36):
“The evidence of the operation of the redress and sanction system indicates that it does not fully meet the objectives of the availability of ‘appropriate measures’ to be pursued where the obligations relating to an EWC are not met. There is no consistent practice across Member States as to whether EWCs have the legal status to bring an action before the courts. In addition, the lack of dedicated financial means [for EWCs] could constitute an obstacle to pursuing a judicial remedy, and the nature and level of sanctions are in many cases not effective, dissuasive and proportionate.”
For a Commission document, this is quite strong wording. However, it does not go on to say what the Commission intends to do about this perceived deficiency. The Commission has a duty under the EU Treaties to take action against member states that it believes have inadequately transposed a directive, and it can do so using persuasion, threats and ultimately a legal challenge at the European Court. It does not do this in any comprehensive way though. We can expect the ETUC to put pressure on the Commission to get serious about challenging the enforcement and penalty provisions in national EWC laws – see the first two points on the ETUC list here. Even BusinessEurope has said the Commission could take action against countries whose sanctions are not sufficiently dissuasive (see paragraph 22 of its position paper here). At this stage, it is difficult to predict how far the Commission will be willing to go, though we very much doubt it would adopt the ETUC demand that penalties should include nullifying or suspending company decisions where consultation has not taken place.
Unions request creation of European Works Council at Amazon as part of recognition campaign
2 April 2018
Trade unions representing workers in France, Spain and Italy have formally requested the creation of a European Works Council at US on-line retailer Amazon. The French Fédération CGT du Commerce et des Services (CGT-Commerce et distribution), Spanish Federación de Servicios a la Ciudadanía de CCOO (FSC-CCOO) and Italian Federazione Italiana Lavoratori Trasporti CGIL (FILT-CGIL) unions have written to the central management of Amazon Europe requesting the company to initiate negotiations in accordance with the EWC directive.
The unions state that the company meets the employee thresholds within the directive (1,000 or more employees in the EEA member states, and 150 or more employees in each of at least two member states), and that they are representatives of Amazon employees in three member states. The company must therefore arrange to set up a Special Negotiating Body representing all its employees throughout the European Economic Area, and begin negotiations within 6 months (by 6 September). The deadline for reaching an agreement establishing an EWC will be 6 March 2021. As a US-based company, it can choose the governing law for the negotiations, and for the EWC that will be set up. It is most likely to opt for the UK or Ireland. The request to create an EWC is part of an on-going campaign by European unions to gain collective, bargaining rights at the company, which has been resisting union demands in Germany and the UK, and to improve pay and working conditions at its distribution centres throughout Europe.
EU Commission publishes notice to stakeholders about Brexit implications for EWCs
29 March 2018
The European Commission’s Directorate-General for Employment, Social Affairs and Inclusion has published a “Notice to Stakeholders” about the implications of Brexit for European Works Councils. The Notice is brief and far from comprehensive, covering just a few of the implications, eg whether a company still meets the employee thresholds when UK employees are excluded, the fact that UK employees would not be entitled to sit on a Special Negotiating Body, and the location of central management’s representative within the EEA.
On all the main points of interest it is silent, for example, the implications for companies with an EWC currently set up under UK law, or the position of UK reps on existing EWCs, or the implications for existing EWCs where a company no longer meets the thresholds. It also takes no account of the transition period expected to apply after Brexit up to the end of 2020. The Notice concludes by saying EWC agreements “should take the abovementioned consequences into account”, though it is difficult to see how this can be done on the basis of the contents of the Notice. We hope the Commission will publish something more comprehensive in due course.
Airbus to consult EWC over job cuts
5 March 2018
European aircraft maker Airbus has said it will consult with its European Works Council following media reports that it plans to cut thousands of jobs. The company is considering axing as many as 3,600 jobs at its sites in Bremen and Augsburg, Germany, Seville Spain and Filton UK following production cuts on its A380 model and the A400M military transporter, according to reports.
The company announced today that it would meet with the European Works Council on 7 March to explain previously announced rate reductions on the A380 and A400M programmes and to discuss associated implications for the workforce. It said it has a policy of first addressing workforce issues with its social partners before any public disclosure, and would continue to abide by this policy. It went on to say it is “committed to managing any social implications in a responsible manner and has demonstrated its ability to find the best possible solutions for its workforce on various occasions in the past”. Only after its initial meeting with the European Works Council on 7 March, will Airbus provide further details on the company’s plans and considerations. Airbus is a European Company (Societas Europaea) and established its European Works Council in accordance with the directive supplementing the Statute for a European company with regard to the involvement of employees. The directive requires an agreement on employee involvement to be in place before a European Company can be registered, with the default being a “representative body” very similar to a European Works Council.
GKN EWC opposes hostile bid from Melrose
27 February 2018
The European Works Council at British engineering giant GKN has issued a strongly negative opinion regarding the hostile takeover offer from Melrose Industries. The highly controversial £7.4billion bid from the US “turnaround specialist” has been vigorously resisted by GKN’s board, and now the company’s EWC has added its voice to the debate.
In its opinion, published on GKN’s website, the EWC said it had reviewed all the information available to date and unanimously agreed that the Melrose proposal would have significant negative impact on the GKN employees in Europe. It said the Melrose bid would be financed by debt, which would be allocated to the GKN balance sheet. The significant level of debt post acquisition would be a burden for the development of the company and limit investment capacity. It said that despite the lack of detail of the proposal it was clear that the business model would result in significant restructuring and jobs losses as well as the sale of strategic assets. Based on these facts the GKN EWC decided to express its opposition to the Melrose bid and urged shareholders to reject the offer. Under the UK Takeover Code (and equivalent rules throughout Europe), employee representatives of a target company – including the European Works Council – must be given the opportunity to express an opinion on a takeover bid, and have that opinion published by the company. There are also rules on information that must be provided by the bidding company about its plans for employment following a takeover, rules which are currently in the process of being strengthened further in the UK.
Significant EWC ruling from the UK’s CAC
15 February 2018
The UK’s Central Arbitration Committee has made another significant ruling on European Works Councils, largely against the employer. The EWC at US IT company Oracle – which was set up under the fallback rules in the UK “TICE” Regulations – complained that the company had carried out a restructuring in Europe involving 380 redundancies without consulting it.
It said the company had refused to hold a face-to-face meeting, instead holding a meeting via teleconference; it refused to provide financial information on the restructuring and other information about the impact of the restructuring on the business and on retained employees; it had implemented decisions before consultation with the EWC was completed; and it had withheld information citing confidentiality, and imposed excessive confidentiality restrictions on what little information it had provided. Oracle said it had done all it was legally required to, more or less admitting it adopted a minimal compliance approach. The CAC ruled that:
- Under the fallback rules I&C should be a “staged rather than an all-in-one process”
- A virtual meeting (ie tele- or video-conference) might be acceptable, but it depends on the circumstances
- Management cannot impose blanket confidentiality restrictions on information provided to the EWC
- Employees who are potentially impacted by a transnational reorganisation are not simply those who may lose their jobs
- EWCs are entitled to information that enables them to understand the rationale/thinking behind a proposal
- The requirement to link national and transnational I&C processes does not require the EWC opinion to be given before management action can be taken at national/local level, and the Regulations do not stipulate that management cannot implement decisions until the EWC has given an opinion.
The last part of the decision will come as a blow to EWCs and trade unions. However, the CAC’s reasoning on this point is brief and it could well be open to challenge, given what is said about how consultation should be conducted. Much of the CAC’s ruling would also apply to companies with an EWC agreement that is subject to the new definitions of “information” and “consultation” in the Regulations. The decision is not binding on other CAC panels in future cases, but it will be influential. The CAC made no orders against Oracle because it had not been asked to do so, and it was too late to do anything about the company’s failings. It is now open to the EWC to apply for a penalty of up to £100,000 against Oracle.
EWC directive expected to apply to UK in transition period after Brexit
21 December 2017
The European Works Council directive is expected to continue to apply to the UK during the transition period after Brexit, it was confirmed this week. The European Commission has drawn up plans for the transition period after Brexit in March 2019 which will see almost all EU laws continuing to apply in the UK up until 31 December 2020, and possibly longer.
In a set of negotiating directives the Commission proposes that all EU laws (known as the ) should apply to the UK as if it were a member state, as well as any changes made to the law during the transition period. This will include the jurisdiction of the European Court. The UK government is expected to agree to this, as it looks to buy more time to prepare for the post-Brexit world. The Commission says the transition period should not last beyond 31 December 2020. Theresa May has said it should be around two years – a little longer than the Commission is offering, though this will be an issue for the negotiations . The Commission’s approach will need approval from the other member states, but that is unlikely to lead to any softening in favour of the UK. Assuming the UK agrees to it, it means that all EU employment directives – including the European Works Council directive – will continue to apply as they do now, until the end of 2020 at least.
EU Commission promises evaluation of recast EWC directive in early 2018
13 December 2017
The European Commissioner for Employment & Social Affairs, Marianne Thyssen, has told the European Parliament that its evaluation of the “recast” European Works Council directive is envisaged to be presented in “early 2018”. In answer to a written question by Belgian MEP Claude Rolin of the European People’s Party (Christian Democrats), Ms Thyssen said the Commission had launched an evaluation of the implementation of the directive, “based on a comprehensive study and focusing on the impact of the new rules and modifications introduced by the recast”.
She said, the outcome of this evaluation is envisaged to be presented in early 2018 and it will be reported to the Parliament, the Council (of member state governments), and the Economic and Social Committee. She added, the report “will specifically assess the extent to which the recast Directive has achieved its goals, notably whether the implementation of the recast Directive has been effective in encouraging the creation of more EWCs, enhancing the effectiveness of employees’ transnational information and consultation, and increasing legal certainty”.
Unilever EWC keeps up pressure over sale of margarine business
30 November 2017
The European Works Council at Unilever is keeping up the pressure on management to fully involve it in the sale of the group’s margarine business (see new item of 15 May). In a press release it said worker representatives had been regularly informed about the sale of the business, but had not been told who potential buyers were.
Press reports say four buyers have been shortlisted – Apollo Global, CVC Capital Partners, KKR and Platinum Equity. The EWC said it wanted to be involved in discussions between Unilever and potential buyers in order to discuss worker demands directly with them. It said it expected the sales discussions to include the maintaining of jobs and working conditions, including company pensions, as key criteria when deciding on a successful bidder. “It should not purely hinge on which of the interested parties is prepared to pay the highest price,” said EWC chair Hermann Soggeberg. “We expect Unilever to ensure that this historic part of our business is handled with care. A buyer should have a business plan based on the sustainable growth of brands and it should also be in a position to offer employees good prospects”.
Trade unions criticise EU’s lack of ambition on worker participation
10 November 2017
Global union federation IndustriAll has criticised the EU Commission’s “lack of ambition” on democracy at the workplace, shown by the fact that no new substantial or legally binding initiative has been taken at European level since the adoption of the Recast EWC Directive in 2009. Its European company policy committee has adopted a declaration saying “workers’ involvement remains, all too often, a pure formality and has limited impact as worker representatives continue to be presented with a fait accompli especially in the event of transnational company restructuring.
Compliance to the letter and spirit of EU legislations is not always secured, nor are sanctions effective and strong enough to discourage non-compliance.” It says the Commission’s inaction remains inexplicable, with the undue delay in releasing its evaluation of the EWC Directive and of the EU quality framework on restructuring (both due June 2016) “preventing any debate about proposals for improvement to advance”. It says the “window of opportunity for substantial initiatives to be taken before the upcoming European Parliament elections (and nomination of a new Commission) is vanishing, not least as a consequence of the 2018 Commission work programme being totally silent on the issue of workers’ involvement” (see news item on 25 October). At best, the Commission proposes to issue a guidance document on the EWC Directive, it says, but “guidelines and other soft measures are no longer sufficient and legally-binding improvements are required for workers’ involvement rights stemming from EU legislation to be fully effective and efficient”. It urges EU institutions to deliver as swiftly as possible on making workers’ involvement in corporate decision-making an effective right, along the lines of the ETUC position papers on revision of the EWC directive and on workplace democracy.
UK’s CAC allows Manpower to negotiate with SNB after 3-year deadline
30 October 2017
The UK’s Central Arbitration Committee has taken its latest decision in a case involving a European Works Council, allowing US staffing firm Manpower to continue negotiating with its Special Negotiating Body after the normal 3 year deadline had passed.
Under the EWC directive and national legislation, companies have 3 years in which to try to reach an agreement with employee representatives on their Special Negotiating Body (SNB) for an agreement establishing a European Works Council. If they fail to reach an agreement in that timescale, the “fallback” rules in the legislation apply, which determine the size of the EWC, the number of reps per country and how they must be selected, and the way in which the EWC must be informed and consulted. However, Manpower and the SNB continued to negotiate well after the 3-year deadline, and eventually signed an agreement several months later. Trade union Unite – which took the case to the CAC on behalf of one of its members at the company – argued that the legislation did not give management and the SNB that flexibility, but that the fallback rules must be complied with after 3 years. This would include holding elections for the UK members of the EWC. The CAC rejected the complaint. It said, firstly, that only the SNB itself – if it still exists – could bring such a complaint. Unite had argued that the SNB automatically dissolved after 3 years, but the CAC disagreed. The SNB did not support the complaint (and the Unite member at the company had failed to get elected onto the SNB). Even if the complaint had been allowed to proceed, the CAC said it would not have upheld it because there was no failure by management to establish an EWC – management and the SNB had been working together to negotiate an agreement after the deadline. And then, even if management had failed in its duty, the remedy the CAC would have imposed would be to require the company to implement the agreement that had been reached, not to impose the fallback rules which neither side wanted. We understand Unite intends to appeal the decision.
EU Commission includes evaluation of Recast EWC directive in its 2018 work programme
25 October 2017
The European Commission has published its work programme for 2018, showing that it still intends to evaluate the “recast” European Works Council directive, but giving no further details or timeframe.
Buried deep in the paperwork is a list of deregulatory “REFIT” initiatives being taken by the Commission under its Priority 5 headed “Simplification and burden reduction for a deeper and fairer Economic and Monetary Union”. Its “overview of initiatives – areas being evaluated” includes European Works Councils and information & consultation of workers. The Commission was required to report on the implementation of the directive no later than 5 June 2016 “making appropriate proposals”. Earlier this year it indicated it intended to publish an evaluation of the Recast EWC directive before the end of 2017 – this timetable seems to have slipped further. It also said it would publish a guidance document concerning the directive “aimed at improving its implementation and establishing greater legal certainty” (see news item on 28 April 2017).
Trade unions want role for EU labour authority with EWCs
10 October 2017
The European Trade Union Institute is calling for the EU Commission’s European Labour Authority – recently announced by President Jean-Claude Juncker – to be given a role monitoring European Works Councils. In an article on the Social Europe website, the ETUI says some of the gaps within EU law and its application could be addressed by the new Authority, including implementation of the EWC Directive.
It suggests the Authority could collect information about a company’s eligibility to set up a European Works Council by monitoring its geographical, ownership, organisational and financial structure. It also says the Authority could provide assistance in solving disputes related to EWCs in order to improve the directive’s enforcement, without immediately resorting to litigation. The ETUI foresees other potential roles for the Labour Authority including helping to determine where employees have a right to representation on the boards of European companies (Societas Europaea or SEs), monitoring the functioning of SE works councils, and assistance in developing transnational collective bargaining systems. It says “expanding the envisaged role of the future European Labour Authority would offer a chance to resolve a host of long-standing practical problems and advance the Europeanisation of industrial relations”. Work on creating the European Labour Authority is going on within the Commission, with a view to getting it up and running by the end of 2018.
Drilling company Saipem sets up new European Works Council
5 August 2017
Italian multinational Saipem has reached an agreement to up a European Works Council, following negotiations with employee representatives. The oil and gas industry contractors – which is 30% owned by Italian energy company Eni – signed the agreement on 17 July, aimed at implementing relations between the company and trade union representatives at European level.
The new EWC will operate by way of an information and consultation process covering themes related to the cultivation of a health, safety and sustainability culture. The process of selecting and electing the representatives of Saipem’s subsidiaries in Europe is now underway. Elected representatives will hold office for three years. The first meeting of the Saipem Group EWC is planned for the autumn.
EWCs: Barely a Blip after Brexit?
5 July 2017
By Eclipse Translations (now RWS Language Solutions)
With the official Brexit negotiations underway, it’s a good time to look at the potential impact of the process on European Works Councils (EWCs).
EWCs were created to bring together the employees of large companies operating in a pan-European capacity. The meetings are an opportunity for employees to share concerns with management and receive updates on company developments and strategy.
The Directive concerned – 2009/38/EC – says any company with more than 1000 employees in the EEA, and at least 150 of them in two member states should establish a European Works Council. Consequently, when the UK leaves the EU, the dynamics of many of these EWCs will be affected.
The EU’s chief negotiator Michel Barnier has emphasised that concerns such as citizens’ rights should be prioritised so it may be some way down the line before we have more clarity on the future of EWCs. In the meantime, the management teams which organise the meetings, the employees who attend them and the interpreters who facilitate their discussions are all wondering what the outcome will be. The Unite union which has many members involved in EWCs has already held a conference dedicated to this issue.
Philip Sack, Director of European Employers Group has been advising companies on setting up and running European Works Councils and UK Information & Consultation arrangements since 2005. Given his unrivalled expertise on the legislative issues and contacts with EWC organisers, he is the ideal person to comment on the implications of Brexit.
In his view, post-Brexit, EWC legislation is unlikely to apply to the UK and this will have implications on works councils based throughout Europe namely:
whether there is a continuing obligation to have a European Works Council
the position of UK representatives on a European Works Council possible redistribution of seats on the EWC whether the governing law of the EWC will change.
Those most closely involved think that the UK government will find it difficult if not impossible to maintain the bulk of this unique legislation. However, for companies whose employee numbers are still above the threshold outlined – even without their UK colleagues – will still need to have an EWC agreement, so companies who have filed their agreement under UK law will need to take action. Agreements can be filed in any EU member state where the company has a presence, so they will need to be transferred, given the similarities in legal system; it seems that many will look to re-file in Ireland. Furthermore, Unite, General Secretary Len McCluskey has argued in favour of finding a solution where UK workers can still have a right to participate in EWCs after the UK exits from the EU. It would certainly be strange to have a situation where some employees may not be able to participate in a council where company strategy is discussed.
For companies where the UK’s withdrawal means they will fall below this threshold, there are perhaps employee relations and practical rather than legal questions on whether to continue. Given the value that the meetings hold for employees and managers to meet and share ideas, Mr Sack believes the likelihood is that many companies will continue to hold their annual or even bi-annual meetings. There is also the practical advantage that if a company subsequently expands in Europe and hits the employee threshold again in the future, there is no need to start from scratch with setting up the works council.
There may be a need to re-allocate the number and allocation of seats but although the UK representatives would not be required to attend, it is still possible with some minor re-wording of the agreement that they can participate as invited guests, or even as full members. Managers are less affected and can be invited from whoever countries are relevant as may guest speakers and industry experts. As the day-to-day operational team tends to be from management side, people are unlikely to want disruption and many will continue to operate in their existing systems.
In conclusion, while there may be some legislative issues, on the ground there is hope that should they choose to do so colleagues across Europe and the UK will be able to continue to communicate with each other for many years to come.
Solvay’s EWC reps join global works council
12 June 2017
Belgian chemical group Solvay has established a global works council, and appointed its EWC reps to four of the eight seats. The Solvay Global Forum was initially set up in 2015 as an informal body designed to foster social dialogue between representatives of its 30,000 employees worldwide and Solvay’s top management.
Its members include four from the European Works Council Secretariat and one each from the United States, Brazil, China and Korea. It has now formalised the Forum as a permanent body, with a four-year agreement signed this month between CEO Jean-Pierre Clamadieu and Forum co-ordinator Albert Kruft. The Global Forum will meet at least once a year, and will monitor implementation of the Global Framework Agreement on social responsibility and sustainable development between Solvay union federation IndustriAll. It will also take initiatives to secure and extend social dialogue inside the group, to analyse the main aspects of the Group’s functioning and propose initiatives for improvement.
Schneider Electric’s EWC gains new role monitoring company employment policy
8 June 2017
French multinational Schneider Electric has given its European Works Council an expanded role in monitoring the company’s employment policy. In an agreement on the anticipation and development of competences and employment, signed with trade union federation IndustriAll Europe, Schneider commits to set up a European Skills & Employment Observatory and to hold a specific annual meeting during the European Works Council plenary session.
At the meeting it will give an overview of how jobs are changing in terms of volume and skills involved, based on indicators such as age pyramid, breakdown of employees by type of function, gender, contract and changes in the structure of new recruits by age, gender and other criteria, as well as sharing the strategy for employment, resources and skills of each business unit. It will also set up a committee comprising IndustriAll reps and the EWC select committee to monitor implementation of the agreement.
Unilever EWC presents list of demands for margarine sell-off
15 May 2017
Unilever’s European Works Council has issued a list of demands to management over the company’s planned sale of its margarine business. When margarine became a separate business back in 2015 the works councils suspected it could be in preparation for a sale.
But Unilever repeatedly denied this. “And now they’re doing it after all”, said Hermann Soggeberg, EWC Chair. “If Unilever really goes ahead with this plan, we expect them to find a buyer who will handle the business and its workers responsibly”. The initial list of demands includes retention of all existing locations and jobs and the preservation of all existing employment conditions, including pension commitments. Any potential buyer must be committed to the margarine business for the long term and have a sustainable business plan. The EWC expects to be involved as early as possible in the parts of the sale process relevant to employees. “This definitely cannot just be about getting the highest possible sale price if it’s at the workers’ expense. We will be watching this very closely”, said Soggeberg.
Unilever’s margarine sell-off faces opposition from EWC
2 May 2017
Unilever’s £6bn sale of its margarine business has run into opposition from the company’s influential European works council, which has raised concerns about possible job losses from any deal. In March Unilever announced its plan to sell the Flora, Bertolli and Stork brands following a review prompted by a rejected £115bn takeover bid from Kraft Heinz.
Hermann Soggeberg, chairman of the EWC said it was seeking commitments to maintain jobs for three years. The sale affects more than 11,000 European employees. The EWC gained similar guarantees when Unilever sold Birdseye in 2006. “The works councils are deeply disappointed that Unilever is taking away part of its own soul to sacrifice it for the shareholders’ profit expectations”, Mr Soggeberg said. “For a long time, the company swore that they would retain the margarine business. Now margarine, as one of the two historic cornerstones of our company, is being sold. This is a serious blow to us all.” A Unilever spokesman said: “We have begun to meet with employee groups about our recent decision and we will listen carefully to their feedback.”
EU Commission to evaluate EWC directive in 2017 and publish new guidance
28 April 2017
The European Commission has said it will publish an evaluation of the Recast EWC directive in 2017. It says it will also publish a guidance document concerning the directive “aimed at improving its implementation and establishing greater legal certainty”.
The comments are made in a staff working document accompanying this week’s launch of the Commission’s European Pillar of Social Rights. The Commission is required by Article 15 of the directive to report on the implementation of the directive no later than 5 June 2016 “making appropriate proposals”, so its planned evaluation is a year late. The fact that it says it intends to publish a guidance document possibly indicates that it has decided not to propose any further revision to the directive at this stage – something that will be welcomed by employer groups, but which will severely disappoint trade unions who have a long list of reforms needed to help EWCs work more effectively.
ETUC seeks big changes to EWC directive
7 April 2017
The European Trade Union Confederation wants big changes to the European Works Council directive when the Commission reviews it this year. In a position paper adopted by its Executive Committee on 15-16 March 2017 in Malta, after long and in-depth discussion with its affiliates, the ETUC has identified priorities for solving difficulties in the practical implementation of the EWC Directive including:
- More effective sanctions, including suspending or nullifying company decisions until consultation is complete, requiring EWC opinions to be taken into account by management, and reducing the differences in sanctions at national level;
- Giving EWCs the legal status and means to launch litigation against the company in defence of rights conferred by the directive;
- A right for trade union experts to participate in all EWC and Select Committee meetings and to have access to all company sites, where an EWC has been set up under the Sunsidiary Requirements;
- Better coordination between local, national and European works councils, with the EWC able to give its opinion before consultation is finished at local/national level, plus access to company sites;
- Bringing contract management, franchise systems and joint ventures within scope of EWCs, and defining more precisely where “central management” is based, to avoid regime shopping;
- An end to exemptions for old “Article 13” agreements;
- Clearer rules for negotiations with the Special Negotiating Body (clear timeframe for first SNB meeting and frequency of meetings):
- Preventing abuse of confidentiality clauses by clarifying more precisely on what grounds, under what circumstances and how long a company may withhold information, and on what grounds EWC members’ right to share information with stakeholders (particularly employee representatives) can be restricted;
- Strengthen the subsidiary requirements to improve the practical functioning of the EWC (e.g. rights and means of Select Committee, enlarged list of topics).
It is unclear at this stage whether the EU Commission will propose any changes to the directive when it publishes its (now overdue) report on implementation.
DS Smith signs Employee Charter with European Works Council
3 April 2017
UK-based packaging firm DS Smith has signed a “ground-breaking” Employee Charter with its European Works Council clarifying its commitment to, and expectations of, its 26,000 employees. The company says the Charter “reinforces and enhances DS Smith’s commitment to consistent, transparent and effective information sharing and consultation with all of its employees”.
The Charter includes commitments by the company to safeguard fundamental employee rights, to keep employees safe while working, to apply a zero-tolerance approach to child labour, to provide open access to senior leaders, to support flexible working and to reward employees fairly and equitably, wherever they are based. It also sets out DS Smith’s core expectations of its employees – from taking pride in their work and being a good ambassador for the business, to taking their full holiday entitlement and avoiding excessive working hours. Chief Executive Miles Roberts said the Charter “builds on the success of our EWC, which has informed and guided many aspects of how we run our operations and has been the formal voice of our employees since it was established in the mid-1990s”. EWC chairman Joseph Reed said the Employee Charter was a natural progression for DS Smith, “building on two decades of close working, cooperation and collaboration” between the company and its EWC and “supporting its drive to become an exemplar employer in the sector”. It is relatively rare for a UK company to sign an agreement like this with its European Works Council, and indicates the growing status of EWCs within multinationals’ employee relations strategy.
Linde EWC vigorously opposes Praxair merger
30 Mar 2017
The European Works Council at Linde has told staff at the German industrial gases group it will vigorously oppose the company’s planned merger with US rival Praxair. After a meeting with Linde executives last week, the EWC sent a letter to employees saying it had become obvious the merger would lead to significant job losses in European countries outside Germany, where the company employs several thousand people.
Linde and Praxair have said the tie-up will save $1 billion through synergies, with Linde seeing the great job cuts. “As an independent and economically sound company, Linde is in an excellent position. We do not need restructuring … Linde does not need Praxair! We call upon the employee representatives in the supervisory board to stand up for Linde’s independence and to vote against the merger with Praxair” the letter said. Workers will also lose their influence over company strategy – the headquarters of the merged business is set to move from Germany, where employees have a legal right to sit on the company’s non-executive supervisory board, to another EU country, likely to be Ireland, the Netherlands or the UK, where there are no such rights. Linde Chief Executive Aldo Belloni said earlier this month he would not push through a deal against the will of workers, but was confident of winning them over. The merger is designed to create an industry leader with a combined market value of $65 billion and revenue of $29 billion that would overtake France’s Air Liquide.
LafargeHolcim sets up new European Works Council
29 March 2017
LafargeHolcim, the world’s largest building materials manufacturer, has signed an agreement establishing a new European Works Council. The Swiss company, formed from a merger between the French company Lafarge and Swiss Holcim in 2015, has brought worker representatives together from the two businesses in the new EWC spanning the group’s operations in Europe.
Sam Hägglund, General Secretary of the European Federation of Building Workers said “We are glad that after a long and intense process and thorough discussions we have come to a new EWC agreement that meets not only the needs of employees and trade unions, but also reflects the ambitions of LafargeHolcim. Being market leader also creates responsibilities for the social dialogue in this group. I do hope that we will also soon come to a similarly modern and balanced agreement at global level, leading to the establishment of a Global Works Council”. LafargeHolcim has activities in 19 European countries – Austria, Belgium, Bulgaria, Croatia, Czech Republic, France, Germany, Greece, Hungary, Italy, the Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Switzerland and the UK – and the newly established EWC will represent more than 20 000 workers from all these countries.
Opel EWC says approval of sale depends on PSA’s plans for Opel’s future
9 March 2017
Opel’s European Works Council has said its approval of an offer by General Motors to sell the car manufacturer to France’s PSA group depends on what its plans are for Opel’s future. In a joint statement with German trade union IG Metall, the EWC demanded the two companies start a negotiation procedure with all involved parties in order to protect the Opel/Vauxhall brands and to “prevent any additional damage, hence steering Opel into a successful future”.
It went on to say “A key active ingredient to this can be the rapid utilization of economies of scale to increase the success of vehicles through the mutual utilization of platforms”. PSA Group has agreed to buy Opel from General Motors for €2.2 billion, creating an auto group to rival Volkswagen.
European trade unions want compulsory EWCs in large multinationals
6 March 2017
European trade unions are calling on the EU to make European Works Councils compulsory in all multinationals over a certain size. Writing for the Social Europe website, European Trade Union Institute researcher Stan De Spiegelaere says around one in three companies involved in cross-border restructuring do not have an EWC, effectively curtailing employees’ leverage in company decisions.
He says these are generally “smaller” multinationals but, as they are involved in transnational restructuring, employees have a real need for relevant information and consultation at a transnational level. Stan believes the reason why are there still so many companies without an EWC is simple: because it is not obligatory. It depends on an initiative from employees or employers, he says, and, in many companies, such an initiative is not taken – perhaps because the employees do not see the value, perhaps because management discourages the employees or perhaps because the employees simply do not know they can organize an EWC. He contrasts the situation with that of the “European Company” (or Societas Europaea), a relatively new corporate legal form in Europe, where management must ask employees if they want a transnational works council. “And the consequence is telling,” he says – “none of the European companies involved in transnational restructuring in the last three years lacks a suitable transnational works council”. The European Commission is currently preparing an evaluation of the EWC “recast” directive, and is expected to propose ways to improve the legal framework by the summer. “Rarely have European policy makers been as lucky as they are now”, says Stan. “They know what the problem is, they know the remedy and they even know it works.”
Opel’s EWC to discuss buy out with PSA counterpart
27 February 2017
Opel’s European Works Council has agreed to discuss the company’s buyout with the EWC at PSA Group. The French carmaker is in advanced negotiations with General Motors to buy the US company’s European operations.
The respective European Works Councils have the right to give an opinion on the sale/acquisition, following consultation by senior management. The two bodies are expected to seek to co-ordinate their respective opinions amid fears that the proposed transaction will lead to job losses, with PSA Group looking to cut costs by closing some Opel and/or Vauxhall plants in Europe.
Unite statement on Brexit implications for EWCs
20 February 2017
UK trade union Unite organised a conference in February on the Implications for European Works Councils and Employment Law Post-Brexit. At the end of the conference delegates adopted a Concluding Statement which said:
“Over 80 of Unite’s senior European Works Council representatives from across manufacturing, services and transport came together over two days to discuss the implications of Brexit for both employment law and their work on European Works Councils…. The delegates were convinced of the important role that they will have, through their roles on EWCS, of both leading the conversation with members on the implications of Brexit and building relationships and solidarity with colleagues from sister unions across Europe.
“To that end the delegates agreed that:
- Unite should continue to fight for the rights of UK employees to continue to fully participate in EWCs post Brexit, including the continuation of legal protections that they currently enjoy.
- To put the issue of Brexit on the agenda of their EWCs and push for an in-depth assessment of the impact of Brexit on their companies.
- To work to include new clauses in their EWC agreements to ensure protection for UK employees post Brexit.
- To share information and experience to prevent companies exploiting Brexit to push down wages and terms and conditions.”
It’s better to work in a company with a European Works Councils
14 February 2017
Employees of US manufacturer Caterpillar were better protected from recent restructuring than some, thanks to its European Works Council, according to the European Trade Union Institute. Writing for the EurActiv website, researcher Stan De Spiegelaere says when decisions are taken by a manager on the other side of the globe, it’s better to be employed in a company like Caterpillar, which has an EWC, than in JP Morgan, Groupon which do not, or until recently even Microsoft which has just set up an EWC.
“Talking to the local management helps”, says Stan, “but doesn’t allow the employees to fully understand the scope of the cross-border restructuring, nor does it allow them to really challenge the management with proper alternatives.” He says the main problem is the employees are talking to the people executing the decisions, not the ones making them. “Luckily, at Caterpillar, employee representatives from different countries meet at least once a year [with] top management [which] resulted in the Caterpillar employee representatives organising a common rally and proposing alternatives directly to the American management”, he says. “Whether it will have any effect remains to be seen, but at least the employees had a chance to voice their concerns and alternatives to those in charge.”
Unite discusses post-Brexit situation with EWC reps
13 February 2017
Unite representatives on European Works Councils discussed the situation of UK reps on EWCs post-Brexit at a training event in London last week. Unite General Secretary Len McCluskey told delegates that EWCs were important because “in a world where capital and profit moves seamlessly across borders, [EWCs] are an example of a social partnership catching up to that reality”.
They are needed in liberalised markets to “offer workers representation and protections to hold the capitalist class to account”, he said. It was of great concern, he said, to hear anecdotal evidence that some employers are already looking at ways to prevent workers from taking up their EWC positions – before EU negotiations have begun. He went on, “these negotiations must include the possibility of UK workers retaining their right to participate in EWCs after the UK exits from the EU”. It was surreal, he said, that “large British companies with thousands of workers in the UK and across the EU, will be forced to operate a EWC but could stop British workers from participating in them”. Unite’s EWC co-ordinator, Jonathan Hayward, told delegates that they should push for “annexes or clauses to keep EWC access in their workplace”, but that “without legal entitlement to keep EWC rights, maintaining access could be used as a bargaining chip that could disadvantage British workers”. He said, it is also clear that “many UK bosses wouldn’t be sad to see EWCs go. Let’s face it: UK management don’t like you lot going to Europe and talking to their bosses, do they?”.